By Kirby Chien
BEIJING (Reuters) -
Alibaba Group, the Chinese Internet
firm, will seek a stronger voice for its management team in
Microsoft's talks to acquire Yahoo, Alibaba's largest
shareholder, a source said on Monday.
Based on the original agreement with Yahoo, which owns 39
percent of Alibaba, the Chinese company is in a very strong
position to influence how shares would be transferred to any
new owner, said the source, who is close to Alibaba.
The problem is a perception by Beijing authorities that an
important Chinese firm could come under the control of
Microsoft Corp, which has a reputation of using monopolistic
tactics, said the source, who is familiar with a team of
bankers and lawyers assembled by Alibaba to review its options.
Officials at Alibaba declined to comment.
Alibaba has not been involved, however, in any talks
between Microsoft and Yahoo, but would get involved as
negotiations get more serious, the source said.
Alibaba's management is assuming the deal will eventually
go through, he said.
Foreign control of large companies in key or strategic
industries is a politically sensitive issue for Beijing, which
has forced many prospective buyers to cut their intended stakes
or simply delayed the application process indefinitely.
Arcelor Mittal, which had already agreed to buy 38.4
percent of Laiwu Steel Co., last year accepted a smaller stake
and higher price to improve its chances of winning government
approval.
Alibaba's four-member board currently includes one Yahoo
representative, Chief Executive Jerry Yang.
Another major shareholder in Alibaba is Japan's Softbank
Corp, which owns about 30 percent of the Chinese company.
Softbank also partners with Yahoo in Yahoo Japan Corp.
($=7.16 yuan)
(Editing by Anne Marie Roantree)
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